Zero Rated Supply
Meaning: It means a supply made by way of export of goods or services or supply of goods or services to an SEZ unit or SEZ developers.
Payment of tax: The entire supply chain will be tax free.
Availment and utilisation of credit: A person making zero rated supply shall be allowed input tax credit on all the eligible supplies received for making such supply.
Registration under GST: A Person Exclusively making zero rated supply may have to take registration under GST as refund of unutilised ITC or IGST paid shall have to be claimed.
Issue of Invoice: A person making Zero Rated Supply shall issue Tax invoice with declaration – Supply meant for EXPORT/Supply to SEZ unit or Developers ON PAYMENT of IGST or under Bond or Under Letter of under Taking WITHOUT PAYMENT OF IGST.
Exempt Supply
Meaning: It is a broader term which includes supply of goods or service that attract NIL rate of tax, Non GST Supply and specific supply which has been wholly exempted from payment of tax by way of an exemption notification.
Payment of Tax: There is no tax liability on the output payable; however, the input supplies used for making outward supply will be taxed at the normal rate.
Availment and utilisation of credit: Input tax credit cannot be availed on exempted supply.
Registration under GST: A Person Exclusively making Exempted Supply is not required to take registration under GST.
Issue of Invoice: A person making exempted supply of goods or services is require to issue a Bill of Supply not tax invoice.
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Is zero rate supply even an exempt supply? Is zero rate and nil rate same under GST?